Although end-of-life medical spending is often viewed as a major component of aggregate medical expenditure, accurate measures of this type of medical spending are scarce. We used detailed health care data for the period 2009-11 from Denmark, England, France, Germany, Japan, the Netherlands, Taiwan, the United States, and the Canadian province of Quebec to measure the composition and magnitude of medical spending in the three years before death. In all nine countries, medical spending at the end of life was high relative to spending at other ages. Spending during the last twelve months of life made up a modest share of aggregate spending, ranging from 8.5 percent in the United States to 11.2 percent in Taiwan, but spending in the last three calendar years of life reached 24.5 percent in Taiwan. This suggests that high aggregate medical spending is due not to last-ditch efforts to save lives but to spending on people with chronic conditions, which are associated with shorter life expectancies.
Bibliographical noteFunding Information:
The authors acknowledge support for their research from the following sources. From Denmark: funding from the Danish National Research Foundation, Helsefonden, the Danish Social Science Research Council, and the Carlsberg Foundation. From England: Maria Aragon and Nigel Rice acknowledge funding as part of the Economics of Social and Health Care Research Unit based at the University of York and funding from the Policy Research Programme in the UK Department of Health. Elaine Kelly acknowledges financial support from the Economic and Social Research Council (Grant Nos. ES/K009060/1 and ES/H021221/1). From Japan: funding from Tohoku University Center for Equal Opportunity for funding, with assistance from Nobuyuki Izumida and Yui Ohtsu in obtaining and analyzing data. From the Netherlands: funding from Netspar and the Health Cloud Project. From Taiwan: funding from Academia Sinica and the Ministry of Science and Technology of Taiwan. From the United States: the European Research Council, Michigan Retirement Center, UK Economic and Social Research Council, US National Institute on Aging, and the US National Institutes of Health Common Fund. The views expressed herein are those of the authors and do not necessarily reflect the views of the funders; the Federal Reserve Banks of Chicago or Richmond or the Federal Reserve System; the National Bureau of Economic Research; the Centre for Economic Policy Research; or the Institute for Fiscal Studies.